WA regulator suggests slashing water bills

Household water charges in Western Australia could fall more than 10 per cent under recommendations from the state's economic regulator.

In an election year when the rising cost of utilities has been touted as a major issue, Tuesday's draft report by the Economic Regulation Authority (ERA) was welcomed by the WA Liberal-National government.

The government, which has been under mounting political pressure over an 86 per cent rise in water tariffs since 2006, has adopted most of the ERA's recommendations in the past.

The latest report suggests adopting a flat rate for wastewater tariffs and offsetting rising water costs with lower wastewater charges.

On average Perth households would save about $128 a year, or 10.5 per cent, from 2013-14, with a similar saving for regional areas.

About 80 per cent of WA households would see their bills fall. For the remainder, increases would be capped at $50 under the new tariff regime.

ERA chairman Lyndon Rowe said the new tariffs would mean a reduced rate of return for the Water Corporation and a reduction in its asset base.

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"(There's been) a significant increase in water prices over the last six years," Mr Rowe said.

"What you're seeing now is a moderation of those increases."

However, the long-term trend was for rising water costs, with Perth becoming more reliant on desalinated water as its climate continued to become drier.

"As an economic regulator, our view is that we want to encourage the efficient and appropriate use of resources," Mr Rowe said.

"If we're going to encourage people to use water wisely, with appropriate investment in water-saving devices, then it's important that paying for water is an accurate reflection of its cost."

WA Water Minister Bill Marmion welcomed the report and said the government would consider the ERA's recommendations for next year's budget.

"The Liberal-National government is conscious of cost-of-living pressures and our record has been that increases in water charges have typically been less than those recommended by the ERA," he said in a statement.

If the government adopts the recommendations, they will come into effect on July 1, 2013.